Question: The difference between average and marginal tax rates is that Multiple Choice Average tax rate is applied to income at the end of each year,

The difference between average and marginal tax rates is that

Multiple Choice

  • Average tax rate is applied to income at the end of each year, whereas marginal tax rate is applied to operating income at the end of each month.

  • Average tax rate is based on average annual earnings, whereas marginal tax rate is based on average monthly earnings.

  • Average tax rate is calculated on total taxable income, whereas marginal tax rate is calculated on next dollar earned.

  • Average tax rate is calculated on next dollar earned, whereas marginal tax rate is calculated on total taxable income.

  • Average tax rate is applied to personal income, whereas marginal tax rate is applied to corporate income.

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